CPA Syllabus - some coursework PDF

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CPA Preparatory Courses Syllabus Effective December 2018

Chartered Professional Accountants of Canada, CPA Canada, CPA are trademarks and/or certification marks of the Chartered Professional Accountants of Canada. © 2018, Chartered Professional Accountants of Canada. All Rights Reserved. 2018-12-03

CPA Preparatory Courses

Syllabus

CPA provincial/regional bodies CPA PREP and CPA PEP contact information

CPA provincial/regional bodies CPA Western School of Business

CPA Education contact information Email: [email protected] Phone: 1.866.420.2350

CPA Ontario

Website: www.cpaontario.ca/contact-us

CPA Atlantic School of Business

Phone: 1.800.387.0735 Email: [email protected] Phone: 902.334.1172

CPA Canada — International

Email: [email protected]

CPA Canada Toronto Head Office

Email: [email protected] Phone: 416.977.0748 or 1.800.268.3793

CPA Preparatory Courses

Syllabus

Table of Contents GUIDE TO THE SYLLABUS ................................................................................ 1 OVERVIEW OF THE CPA PREPARATORY COURSES ..................................... 2 INTRODUCTORY FINANCIAL ACCOUNTING .................................................... 5 INTERMEDIATE FINANCIAL REPORTING 1 ...................................................... 9 INTERMEDIATE FINANCIAL REPORTING 2 .................................................... 15 ADVANCED FINANCIAL REPORTING ............................................................. 24 INTRODUCTORY MANAGEMENT ACCOUNTING ........................................... 30 INTERMEDIATE MANAGEMENT ACCOUNTING ............................................. 33 CORPORATE FINANCE .................................................................................... 39 AUDIT AND ASSURANCE ................................................................................. 44 TAXATION ......................................................................................................... 48 PERFORMANCE MANAGEMENT..................................................................... 54 ECONOMICS ..................................................................................................... 58 STATISTICS ...................................................................................................... 61 BUSINESS LAW ................................................................................................ 63 INFORMATION TECHNOLOGY ........................................................................ 64

CPA Preparatory Courses

Syllabus

GUIDE TO THE SYLLABUS Purpose The purpose of the Syllabus is to provide detailed information on the content of the CPA preparatory courses. This document has been produced for education administrators, course authors, course examiners, committee members and resource people in the CPA education system; current and potential students and those who advise them; and others in the professional, academic and general community. Contents The remaining sections of this introduction provide background information on the major features of the CPA preparatory courses. The main part of the Syllabus comprises the course descriptions and outlines of the course content, in the following subject areas: • • • • • • • • • •

financial accounting management accounting finance auditing taxation performance management economics statistics business law information technology

Students are not required to complete all courses, just the ones in which they lack subject area coverage. The amount of information provided for each course in this edition of the Syllabus depends on its status; courses under review or development may have only a provisional description.

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CPA Preparatory Courses

Syllabus

OVERVIEW OF THE CPA PREPARATORY COURSES Mission The CPA preparatory courses are high-quality educational courses accessible for students wanting to complete the prerequisite education required to enter the CPA Professional Education Program (CPA PEP). Features The CPA preparatory courses meet the standards of education and examination required for individuals to enter the CPA PEP. The CPA profession is recognized internationally as a leading developer and provider of competency-based professional accounting education. Competencies The CPA preparatory courses are competency-based, emphasizing development of the key areas of knowledge and enabling competencies required of accountants and senior financial managers, including: •

professional expertise in accounting and related areas

•

interpretive, judgmental and analytical skills

•

management of change in the technologies, processes and structures of organizations

•

use of complex information systems in decision-making

The CPA profession is committed to the concept of lifelong learning. Its competencybased approach is maintained in professional development courses and career development following certification.

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CPA Preparatory Courses

Syllabus

Structure

Core courses

Non-core courses

The structure of the CPA preparatory courses is as follows: Introductory Financial Accounting Introductory Management Accounting Economics Statistics Business Law Information Technology Intermediate Financial Reporting 1 Intermediate Financial Reporting 2 Advanced Financial Reporting Corporate Finance Audit and Assurance Taxation Intermediate Management Accounting Performance Management

Admission requirements To be admitted into a CPA preparatory course, applicants require: •

30 credit hours or equivalent of education at a post-secondary institution (30 credithours1/academic year)

•

good character

To be admitted to the CPA PEP, applicants require: •

an undergraduate degree or master’s degree

•

completion of prerequisite learning

•

120 credit-hours or equivalent of education (30 credit-hours1/academic year)

•

good character

1

Credit-hour is an input measure meant to reflect student time required to earn credit for the course. Generally, a three-credit course requires 33 hours of contact time (lecture, and so on) or 132 hours of student engagement time (lectures, tutorial, practice activities, testing or assessment, or preparation).

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CPA Preparatory Courses

Syllabus

Course descriptions and outlines The pages that follow contain the descriptions (including prerequisites) and outlines for each of the CPA preparatory courses. Some courses may still be under development; consequently, this information may change. CPA Canada reserves the right to make changes to the Syllabus without prior notice. FINANCIAL ACCOUNTING COURSES

Introductory Financial Accounting Intermediate Financial Reporting 1 Intermediate Financial Reporting 2 Advanced Financial Reporting

MANAGEMENT ACCOUNTING COURSES

Introductory Management Accounting Intermediate Management Accounting

FINANCE COURSE

Corporate Finance

AUDIT COURSE

Audit and Assurance

TAXATION COURSE

Taxation

PERFORMANCE MANAGEMENT COURSE

Performance Management

GENERAL BUSINESS COURSES

Economics Statistics Business Law Information Technology

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CPA Preparatory Courses

Syllabus

INTRODUCTORY FINANCIAL ACCOUNTING Non-core course Prerequisites None Course description Introductory Financial Accounting is the first financial accounting course in CPA preparatory courses. This course is an integrated introduction to accounting principles and practices. It is designed to help you begin to understand accounting information and help you gain an appreciation for its uses and limitations. Resources Harrison, Horngren, Thomas, Tietz, Berberich, and Seguin, Financial Accounting, sixth Canadian Edition (Pearson, 2018) Grading MyAccountingLab quizzes (4 quizzes, 5% each) Final examination (3 hours)

20% 80% 100%

Quizzes grades are based on the marks you receive. The total mark needed to pass the course is 50% (with an average of 65% across all core prerequisite courses required for entry into the CPA PEP). Course outline Chapter 1: The Financial Statements •

Explain why accounting is the language of business.

•

Explain accounting’s conceptual framework and underlying assumptions.

•

Describe the purpose of each financial statement and explain the elements of each one.

•

Explain the relationships among the financial statements.

•

Make ethical business decisions.

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Chapter 2: Recording Business Transactions •

Describe common types of accounts.

•

Record the impact of business transactions on the accounting equation.

•

Record business transactions in T-accounts.

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Record business transactions in the journal and post them to the ledger.

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Prepare a trial balance.

Chapter 3: Accrual Accounting and the Financial Statements •

Explain how accrual accounting differs from cash-basis accounting.

•

Apply the revenue and expense-recognition principles.

•

Record adjusting journal entries.

•

Prepare the financial statements.

•

Record closing journal entries.

•

Analyze and evaluate a company’s debt-paying abilities.

Chapter 4: Internal Control and Cash •

Describe fraud and its impact.

•

Explain the objectives and components of internal control.

•

Prepare and use a bank reconciliation.

•

Apply internal control to cash receipts and cash payments.

•

Construct and use a budget to manage cash.

Chapter 5: Short-Term Investments and Receivables •

Account for short-term investments.

•

Account for and control receivables.

•

Estimate and account for uncollectible accounts receivable.

•

Account for notes receivable.

•

Explain how to improve cash flow from sales and receivables.

•

Evaluate a company’s liquidity.

Chapter 6: Inventory and Cost of Goods Sold •

Account for inventory using the perpetual and periodic inventory systems.

•

Explain and apply three inventory costing methods.

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•

Explain how accounting standards apply to inventory.

•

Analyze and evaluate gross profit and inventory turnover.

•

Use the cost-of-goods sold (COGS) model.

•

Analyze how inventory errors affect the financial statements.

Chapter 7: Property, Plant and Equipment, and Intangible Assets •

Describe the types of tangible and intangible assets a business may own.

•

Measure and account for the cost of property, plant and equipment.

•

Calculate and record depreciation on property, plant and equipment.

•

Explain additional topics in accounting for long-lived assets.

•

Account for intangible assets.

•

Analyze and evaluate a company’s return on assets.

•

Interpret tangible and intangible asset activities on the statement of cash flows.

Chapter 8: Long-Term Investments and the Time Value of Money •

Analyze and report non-strategic investments.

•

Analyze and report investments in affiliated companies using the equity method.

•

Analyze and report controlling interests in other corporations using consolidated financial statements.

•

Analyze and report long-term investments in bonds.

•

Report investing activities on the statement of cash flows.

•

Explain the impact of the time value of money on certain types of investments.

Chapter 9: Liabilities •

Explain and account for current liabilities.

•

Explain the types, features and pricing of bonds payable.

•

Account for bonds payable.

•

Calculate and account for interest expense on bonds payable.

•

Explain the advantages and disadvantages of financing with debt versus equity.

•

Analyze and evaluate a company’s debt-paying ability.

•

Describe other types of long-term liabilities.

•

Report liabilities on the balance sheet.

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Chapter 10: Shareholders’ Equity •

Explain the main features of a corporation.

•

Account for the issuance of shares.

•

Explain why a company repurchases shares.

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Account for retained earnings, dividends and stock splits.

•

Distinguish between fair value and book value per share.

•

Evaluate a company’s return on equity using DuPont analysis.

•

Evaluate equity transactions and events in the financial statements.

Chapter 11: The Income Statement, the Statement of Comprehensive Income and the Statement of Shareholders’ Equity •

Evaluate the quality of earnings.

•

Account for other items on the income statement.

•

Compute earnings per share.

•

Analyze the statement of comprehensive income and the statement of changes in shareholders’ equity.

•

Differentiate between management’s and the auditor’s responsibilities in financial reporting.

Chapter 12: The Statement of Cash Flows •

Explain the uses of the statement of cash flows.

•

Explain and classify cash flows from operating, investing and financing activities.

•

Prepare a statement of cash flows using the indirect method of determining cash flows from operating activities.

Chapter 13: Financial Statement Analysis •

Perform a horizontal analysis of financial statements.

•

Perform a vertical analysis of financial statements.

•

Prepare common-size financial statements.

•

Use the statement of cash flows in decision making.

•

Use ratios to make business decisions.

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CPA Preparatory Courses

Syllabus

INTERMEDIATE FINANCIAL REPORTING 1 Core course Prerequisites Introductory Financial Accounting Introductory Management Accounting Course description This six-week course builds on the introductory financial accounting skills that you acquired in Introductory Financial Accounting. It primarily focuses on the assets side of the statement of financial position. As you progress through this course, you can expect to develop and strengthen both technical and enabling competencies. Your main focus will be on the technical competencies found in the financial reporting section of The CPA Competency Map; you will develop these competencies at A, B and C levels in preparation for your entry into the CPA PEP. Mastering these competencies will give you a solid foundation for entry into the CPA PEP. Resources Students will be given access to Knotia, which contains a collection of standards, rules and guidelines published by CPA Canada. Students are encouraged to start becoming familiar with the standards as currently provided through the CPA Canada Handbook. In Canada, practitioners follow the standards in the CPA Canada Handbook – Accounting. Grading Quizzes Assignments Exam

12% 18% 70% 100%

The total mark needed to pass this course is 60% (with an average of 65% across all core prerequisite courses required for entry into the CPA PEP). Course outline TOPIC 1.1: INTRODUCTION 1.1-1 1.1-2

Prerequisite knowledge Structure of course materials

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CPA Preparatory Courses

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TOPIC 1.2: ACCOUNTING STANDARDS IN CANADA 1.2-1 1.2-2 1.2-3

Generally accepted accounting principles Development of new and revised accounting standards Effect of legislation on accounting standards

TOPIC 1.3: THE CONCEPTUAL FRAMEWORK FOR FINANCIAL REPORTING 1.3-1 1.3-2 1.3-3 1.3-4 1.3-5 1.3-6 1.3-7 1.3-8 1.3-9 1.3-10

Components of the IFRS Conceptual Framework for Financial Reporting Users of financial reporting Objectives of financial reporting Fundamental qualitative characteristics Enhancing qualitative characteristics The cost constraint (cost versus benefit) Underlying assumption — going concern Capital maintenance The elements of financial statements Measurement of the elements of financial statements

TOPIC 1.4: THE ASPE FRAMEWORK 1.4-1

ASPE framework contrasted with IFRS conceptual framework

TOPIC 1.5: FINANCIAL STATEMENTS 1.5-1 1.5-2 1.5-3 1.5-4 1.5-5 1.5-6

Required financial statements — ASPE Financial statements — general requirements Statement of financial position The statement of profit or loss and other comprehensive income (statement of comprehensive income) Statement of changes in equity Events after the reporting period (subsequent events)

TOPIC 1.6:

ACCOUNTING INFORMATION SYSTEMS AND INFORMATION TECHNOLOGY

1.6-1 1.6-2 1.6-3

Accounting software Information technology Current trends in computerized accounting information systems

TOPIC 1.7:

ETHICS

TOPIC 1.8:

THE ACCOUNTING CYCLE

TOPIC 2.1: GOVERNING STANDARDS

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TOPIC 2.2: REVENUE RECOGNITION 2.2-1 2.2-2 2.2-3 2.2-4 2.2-5 2.2-6

Revenue recognition — general criteria Initial and subsequent measurement Multiple performance obligations (deliverables) Principal-agent arrangements Consignment arrangements Bill-and-hold arrangements

TOPIC 2.3: CASH AND CASH EQUIVALENTS TOPIC 2.4: ACCOUNTS RECEIVABLE 2.4-1 2.4-2 2.4-3 2.4-4 2.4-5 2.4-6

Recognition Initial measurement Subsequent measurement Allowance for doubtful accounts Derecognition of accounts receivable Presentation and disclosure

TOPIC 3.1: REVENUE RECOGNITION — CONTINUED 3.1-1 3.1-2 3.1-3

Revenue recognition — construction contracts Revenue recognition under ASPE Presentation and disclosure

TOPIC 3.2: CASH AND INTERNAL CONTROL 3.2-1

Bank reconciliations

TOPIC 3.3: NON-TRADE RECEIVABLES — OTHER RECEIVABLES TOPIC 3.4: NON-TRADE RECEIVABLES — NOTES RECEIVABLE 3.4-1 3.4-2 3.4-3 3.4-4 3.4-5 3.4-6 3.4-7

Recognition Initial measurement Subsequent measurement — IFRSs Subsequent measurement — ASPE ...